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Sun 13 Feb 2011 10:56 AM

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Canada may block LSE, Toronto merger over Dubai fears

Ontario’s Finance Minister says he’s unhappy about Dubai’s stake in $6.7bn merged exchange

Canada may block LSE, Toronto merger over Dubai fears
Canada may block LSE, Toronto merger over Dubai fears
London Stock Exchange
Canada may block LSE, Toronto merger over Dubai fears
Qatari investor stock exchange

Ontario may move to block a proposed $6.7bn merger between the
London Stock Exchange and Canada's TMX, over fears Dubai will end up owning
11.3 percent of the new exchange.

Ontario’s Finance Minister Dwight Duncan said the idea Dubai
would be the largest single shareholder in the exchange raised political red flags
that could prompt the Canadian government to step in and derail the deal.

“We do business with the Middle East. I am just not sure I
want them owning our stock exchange,” Duncan told the Globe & Mail.

"Obviously that's something that governments at the
federal level have to contemplate. All we're saying is that is a strategic
asset in a strategic industry.

Borse Dubai saw its 20 percent stake in LSE gain more than
$25m overnight on news of the proposed merger, which would create the world’s fourth-largest

The combined entity would become a top centre for trading
mining and energy shares, with $4.1 trillion of stock changing hands a year.

Under Canadian law, the province of Ontario can move to
block the stock exchange deal if it deems it not to be in the public interest.

 “I am just not going
to be one of those that says ‘okay, go ahead,’” Duncan told the paper.

His comments will be seen as the latest round in a
long-running diplomatic feud between the UAE and Canada, sparked by Ontario’s
refusal to grant new landing rights to UAE carriers.

Relations between the oil-rich UAE and Canada have
deteriorated rapidly since November, when Canada’s transport agency refused to
give Gulf carriers Etihad and Emirates fresh landing rights.

The Gulf state retaliated with the closure of Camp Mirage, a
secret military base located outside Dubai and used to supply Canadian troops
in Afghanistan.

The political feud took a new turn in December, when the UAE
Embassy announced Canadian citizens would no longer receive free visas.
Instead, tourists must now pay up to $1,000 Canadian dollars to enter the

Canadian Prime Minister Stephen Harper last month accused
the UAE of attempting to capitalise on Ottawa’s operations in Afghanistan to
secure more landing rights for its flagship airlines.

“That’s just not how you treat allies, and I think tells us
you better pick your friends pretty carefully in the future,” he said.

Arabian Business digital magazine: read the latest edition online

John 9 years ago

This is a lot worse for the UAE than a few refused landing slots in Canada, and those at the airlines and in the ministries should now realise they are dealing with a sovereign nation.

Anthony Maroley 9 years ago

The merger will not go through because Canadians are aware of the type of business practices employed by the UAE post the real estate crash.

Johnny Blaze 9 years ago

Who cares? So let them refuse it. They still own a large percentage of the London Stock Exchange! Like UAE will lose sleep if TMX and London don't merge!

Sax 9 years ago

Perfect example on how stupid the Canadian leadership is now. Sheikh Mohammed will own an 11% share, true; but it is neither a controlling nor a majority share. In effect, he has put his money and will not have a decision in how the organization is managed.

But tell that to Canadians during an election year.

Actually, this isn't a lot worse than anything. It is Canadians who are paying the price for the stupidity of their leadership when it comes to Landing Slots, not the UAE. All aviation contacts stipulate the right of the airline to cancel its purchases; so the UAE isn't stuck with anything. Canadians, however, will not have a way to export their products.

You live in the UAE post real estate crash, yet you speak badly about its leadership. Why the contradiction?

Ahmed Al-Azzawi 9 years ago

what utter rubbish. For a nation that claims free markets and trade, Canada is surely acting like a protectionist state.
Lets see how they will react if the UAE decides to kick out all canadian companies from here?
you will have an additional 28,000 unemployed Canadians.

Free markets are for the benefit of all. If you claim to be a nations that adheres to free trade then why the ban?

Imran 9 years ago

@ Ahmed... I do agree with you to a certain extent but free markets and trade is for the purpose of benefiting its own population, not the partnering one ONLY. I always remember the picture of what the US-Canada Free Trade Agreement means and the NAFCO as well; it shows the US taking an elephant from canadians and canadians getting a rabbit in return. Canadians learned their lesson, why repeat a similar scenario that would only benefit a smaller country, no matter how much money it has? This is not about free markets or trade, its about principal, its about do's and don'ts and its about preserving its core values, not money for Canadians, maybe for the UAE that's all that matters.

Not sure where you got your facts on 28,000 canadians living in the UAE and even if that were true, how many do you think are true canadians, 1000 of them? The rest simply took the passport to gain from the benefits of the free healthcare, free education and freedom to travel anywhere worldwide hassle free

NB 9 years ago

Hope ETISALAT, DU, TRA and O&G entities in the UAE are listening to you!!

Salim Shaikh 9 years ago

As expected the plot will now unfortunately thicken. It was totally unjustified to have overreacted with visa and base closure over traffic rights, which are usually negotiated based on reciprocal arrangements between two national carriers in absence of open sky policy between any one side.

Jake 9 years ago

comes in handy to demand free trade and open markets from others, yet you fail to deliver such on your home turf.

I just wonder why, I have to pay just as much, here for any product, as I would in any other country that has VAT or other taxation.

Vicky 9 years ago

Canada should carefully evaluate the merger proposal since UAE has shown that it doesn't think much before dragging private trade dispute into the state diplomacy arena. Just like USA thought hard on P&O and DPA deal, it is now Canada`s turn to put their country's interests first.